Most of the action was in currencies as financial markets in major Asian centres Japan, China and South Korea were closed for a holiday.

Investors were squarely focused on the Sino-U.S. trade war as China added $60 billion of U.S. products to its import tariff list, retaliating against U.S. duties on $200 billion of Chinese goods that come into effect on Monday.

China also cancelled mid-level trade talks with the United States, as well as a proposed visit to Washington by vice premier Liu He originally scheduled for this week, the Wall Street Journal reported.

The United States, meanwhile, does not have a date for further talks.

The intensifying dispute between the world’s two biggest economies has spooked financial markets worried about the fallout on global growth.

The Japanese yen, which sees fund inflows during times of crisis, ticked up to 112.5 per dollar from a recent two-month trough while the trade-sensitive Australian dollar slipped from a 3-1/2 week top to $0.7274.

“The trouble is that further escalation is still on the cards as both sides are still well apart on the key issues,” said AMP Chief Economist Shane Oliver.

“Trump remains defiant saying ‘it’s time to take a stand on China’ and his threat to increase tariffs on all imports from China remains.”

Oliver remained optimistic about Chinese growth as authorities in Beijing step up policy stimulus to offset the economic impact of the tariffs.

Chinese Premier Li Keqiang said over the weekend China will cut import and export costs for foreign firms as it looks to promote an image of being open for business.

“Our view remains that a negotiated solution is likely but it’s unlikely to come until later this year or early next,” Oliver said.